The registration was going beautifully until the sub registrar asked a quiet question. A Hyderabad couple, buying a sixty eight lakh rupee flat in Nallagandla, had lined up their sale deed, their demand draft, and their slot booking. Then someone asked whether they had deducted TDS and filed Form 26QB. Blank looks followed. They had paid the seller the full amount, which meant the one percent that the law required them to withhold and hand to the government was now money they had to arrange all over again. It is one of the most common and most avoidable mistakes an Indian home buyer makes, and it has nothing to do with stamp duty or registration charges.

The short answer. If you buy a flat, plot or building in Hyderabad where the sale consideration or the stamp duty value is Rs 50 lakh or more, you, the buyer, must deduct one percent as tax at source under Section 194-IA, deposit it using Form 26QB within 30 days from the end of the month in which you deducted it, and give the seller a Form 16B certificate. The trade off to understand is simple: this is not an extra cost to you, it is the seller's tax that you are legally required to withhold from what you pay them, so the mistake is not the money, it is failing to withhold it and then owing it yourself along with interest. You do not need a TAN for this; your PAN is enough.

Who actually has to deduct the TDS when you buy a Hyderabad flat?

The buyer deducts the tax, not the seller and not the bank. The official Income Tax Department guidance is explicit that any person responsible for making payment to a resident seller of immovable property must deduct tax, and that the buyer carries this duty. This surprises many first time buyers who assume the seller handles their own taxes or that the housing loan bank takes care of it. In practice the responsibility sits entirely with you. You reduce the payment to the seller by one percent and route that one percent to the government. If you are taking a home loan, coordinate with your bank so that the disbursement accounts for the deduction, because the bank paying the seller directly does not remove your obligation to deduct and report. You can read the department's own explainer on TDS on the purchase of immovable property before you register.

What is the Rs 50 lakh threshold, and is TDS on the full amount?

The threshold is Rs 50 lakh, and the one percent applies to the whole consideration, not only the slice above 50 lakh. The Income Tax Department states that tax must be deducted "if the amount of sales consideration or stamp duty value is Rs. 50 lakhs or more," at "the rate of 1% of sales consideration or stamp duty value," whichever is higher. Two points matter for a Hyderabad buyer. First, the comparison is against the higher of what you are paying and the government determined stamp duty value, so if the state market value of your flat is higher than your agreed price, the TDS is worked out on that higher figure. Second, there is no partial exemption: a flat at Rs 62 lakh attracts one percent on the full Rs 62 lakh, not on the Rs 12 lakh above the threshold. Rural agricultural land is the notable exclusion, but ordinary Hyderabad apartments and plots are squarely covered.

How and when do you deposit the TDS using Form 26QB?

You deposit it through Form 26QB, a combined challan and statement, within 30 days from the end of the month of deduction. The department requires the deductor "to furnish a challan-cum-statement in Form 26QB" and to deposit the tax "within 30 days from the last day of the month in which the tax was deducted." So if you deduct in July, the clock runs to the end of August. Form 26QB is filed online, you pay the tax at the same time, and the system links the deduction to both your PAN and the seller's PAN. This is why collecting the seller's correct PAN before registration is not optional; a wrong or missing PAN can push the deduction into a much higher rate and create a mismatch that is painful to unwind later. Treat Form 26QB as part of the same week as your registration, not a task for some vague future date.

Do you need a TAN, and what about joint buyers or installments?

You do not need a TAN; your PAN is sufficient for a property TDS deduction. The department confirms there is "no requirement to apply or obtain" a Tax Deduction or Collection Account Number, and that "a deductor can use his PAN in place of TAN." That removes one bureaucratic step that trips up buyers who assume TDS always needs a TAN. Two common Hyderabad situations still need care. If you and your spouse are joint buyers, each buyer generally files a separate Form 26QB for their share, so plan the paperwork for every name on the deed. If you are paying the builder in installments, the deduction is made on each payment as it is made, not in one lump at the end, so every milestone payment on an under construction flat carries its own one percent. When in doubt about a specific structure, confirm the mechanics on the Income Tax portal rather than guessing.

What happens if you forget or delay the TDS?

You become personally liable for the tax you failed to deduct, plus interest and a late filing fee. The core risk is the one the Nallagandla couple discovered: once you have paid the seller in full, the one percent you should have withheld is money you now have to find yourself. On top of that, the Income Tax Act charges interest for late deduction and late deposit, and a fee for late filing of the statement. Because the exact interest rates, fee per day and any penalty depend on the current provisions, confirm the live figures on the Income Tax portal or with a chartered accountant before you assume a number. The practical lesson is preventive: deduct at the time of payment, file Form 26QB promptly, and keep the challan. A clean TDS trail also protects the seller, whose tax credit flows from your correct filing, and keeps your own records tidy if you ever sell the flat again.

How does this connect to your Telangana stamp duty and registration?

TDS is a separate central tax obligation that runs alongside your Telangana stamp duty and registration charges, not a part of them. It is easy to blur the two because both are settled around the same registration event, but they go to different places for different reasons. Stamp duty and registration fees are state levies you pay to register the deed at the sub registrar office; TDS under Section 194-IA is a central income tax deduction you make from the seller's money and deposit with the central government. Both, however, can hinge on the same stamp duty value, so knowing that figure matters twice over. If you have not yet mapped your total transaction cost, our guide to stamp duty and registration charges in Hyderabad sets out the state side, and if your project is still under construction, our explainer on possession delay rights under RERA covers what happens if the builder runs late.

Your Section 194-IA action checklist for a Hyderabad purchase

Run through these seven steps around your registration week so the deduction never becomes an afterthought.

1. Confirm whether your consideration or stamp duty value reaches Rs 50 lakh, using the higher of the two figures.
2. Collect the seller's correct PAN and your own, since Form 26QB is built around both.
3. Deduct one percent from the payment to the seller at the time you actually pay, including each installment.
4. File Form 26QB online and pay the deducted tax within 30 days from the end of that month.
5. Download and hand the seller their Form 16B certificate within the timeline the portal specifies.
6. If you are joint buyers, prepare a separate Form 26QB for each buyer's share of the property.
7. Save the challan, Form 26QB acknowledgement and Form 16B with your sale deed for future reference.

Frequently asked questions

Is TDS on property an extra cost over and above the flat price?

No. The one percent is the seller's income tax, which you withhold from what you pay them and deposit with the government. It becomes a cost to you only if you fail to deduct it, because then you must pay it yourself. So reduce the seller's payment by one percent through Form 26QB.

Does the Rs 50 lakh limit apply to each buyer or to the whole property?

The threshold looks at the property's total consideration or stamp duty value, not each buyer's share. So a flat priced at Rs 60 lakh bought jointly still crosses the limit and attracts TDS, even though each buyer funds only part of it. Joint buyers usually file separate Form 26QB statements for their respective shares.

When exactly must I deposit the TDS after buying in Hyderabad?

You must deposit the deducted tax through Form 26QB within 30 days from the last day of the month in which you made the deduction. For a deduction made in July, that means by the end of August. Filing and payment happen together on the portal, so do not postpone it past your registration week.

Do I need a TAN to deduct TDS on my flat purchase?

No. The Income Tax Department confirms that a property buyer does not need a Tax Deduction Account Number for a Section 194-IA deduction and can use their PAN instead. This removes a step many buyers assume is mandatory. You still need the seller's correct PAN, because a wrong or missing one can trigger a higher deduction rate.

Last updated 2026-07-19. PropNewz Team.